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Nigeria Business Formalisation Shows Modest Recovery

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Nigeria Business Formalisation rises to 46% in 2025, reflecting slow but steady adoption of registration among entrepreneurs

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Nigeria Business Formalisation recorded a modest rebound in 2025, with 46 percent of entrepreneurs reporting formally registered enterprises, up from 42 percent in 2024, according to the 2025 State of Entrepreneurship Survey by FATE Foundation.

Also read: ILARA-MOKIN HOST BUSINESS NETWORK GOLF TOURNAMENT

Despite the improvement, 54 percent of businesses remain unregistered, highlighting persistent informality in the country’s entrepreneurial ecosystem.

Analysis of survey data shows a five-year pattern of fluctuation, with unregistered businesses accounting for 44 percent in 2021, rising to 58 percent in 2024 before easing slightly in 2025.

Analysts attribute the incremental recovery to growing confidence in regulatory processes, aided in part by digital registration platforms introduced by the Corporate Affairs Commission (CAC).

However, structural challenges continue to impede formalisation, particularly for nano and micro enterprises.

Constraints include limited access to information, mistrust of public institutions, and perceptions that registration costs outweigh benefits.

Among registered businesses, CAC remains the dominant body, with more than two-thirds of enterprises reporting affiliation.

The survey indicates gradual diversification, with registrations under the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) rising from 19.1 percent in 2024 to 24.7 percent in 2025.

Registration with formal trade associations also increased to 7.5 percent from 6 percent, while cooperative societies and local trade associations are gaining traction among smaller businesses seeking semi-formal recognition.

Business age remains a key factor in formalisation.

Firms less than one year old continue to show the highest informality, although the share of unregistered new businesses declined from 82 percent in 2024 to 68.2 percent in 2025.

Enterprises under five years old operated 63 percent informally, a marginal improvement from 64 percent the previous year, suggesting growing awareness among early-stage entrepreneurs.

Adenike Adeyemi, Executive Director at FATE Foundation, noted: “Overall, the survey shows incremental gains in formalisation across both new and established businesses. Yet, persistently high informality among younger firms highlights enduring structural barriers including procedural costs, weak incentives, and the limited perceived value of formal registration.”

Also read: Sanwo-Olu Seeks World Bank Support After Lagos Tops Business Ranking

The survey highlights ongoing challenges for policymakers seeking to strengthen business registration, with implications for taxation, regulatory oversight, and access to finance for small and growing enterprises.

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Tinubu to Open Niger Delta Economic Summit in Port Harcourt

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Tinubu Niger Delta summit opens in Port Harcourt as investors and policymakers gather to drive investment, innovation and industrial growth

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Dangote Refinery Sets ₦525 Share Price for Landmark IPO

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Dangote Petroleum Refinery has set its initial public offering price at ₦525 per share, with the company seeking to raise about ₦2.15 trillion as it prepares to enter Nigeria’s public equities market.

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The Securities and Exchange Commission has approved the offer for 4.1 billion ordinary shares at ₦525 each. If fully subscribed, the offer would generate approximately ₦2.15 trillion, equivalent to about $1.6 billion at current exchange rates.

The offering is expected to open on 14 September 2026, according to Aliko Dangote, the president of Dangote Industries. The planned sale is positioned to become one of the largest equity offerings in Africa.

The IPO marks a significant step in Dangote Group’s plans to broaden ownership of the refinery and raise additional capital for expansion.

The refinery currently has a stated processing capacity of 650,000 barrels of crude oil per day. Dangote has said the company plans to increase that capacity to 1.4 million barrels per day as part of its longer-term expansion strategy.

The planned share sale follows a $1 billion underwriting programme completed in August, providing additional financial backing ahead of the public offering.

The refinery, located in the Lekki area of Lagos State, is one of Africa’s largest industrial projects and has become an increasingly important player in Nigeria’s fuel supply market since beginning operations.

The public offering will give Nigerian investors an opportunity to acquire shares in the refinery directly, while providing Dangote Petroleum Refinery with fresh capital to support its next phase of growth.

The company has also indicated ambitions to expand beyond its current Nigerian operations, with Dangote recently announcing plans for another refinery project in Kenya.

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Glo @23: Staff Unite for a Memorable Sports Celebration

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Glo marks its 23rd anniversary with a lively staff sports fiesta in Lagos, featuring football, games, prizes and celebrations centred on teamwork (more…)

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